Skill Building through CSR: The Catalyst for ‘Make in India’

In his speech on India’s 68th Independence Day, Prime Minister Narendra Modi made his view on skill development very clear. And he has continued to emphasise on it in most of his public addresses, be it on Teacher’s Day for students across the country, or at the Madison Square Garden amidst the American Indian community. As preliminary steps are being taken by the government to promote skill development in relation to the larger ‘Make in India’ mission, the role that corporations and industry associations can play under the umbrella of the new CSR law has to be discussed and planned in an equally coherent manner.

Need for Skill Development

Although India’s demographic dividend is usually lauded as one of its strengths, this has to be understood with caution. Unless skilled, and provided with employment opportunities, the huge demographic dividend that aims to propel India onto the world stage might end up being a liability rather than an asset.

According to the National Skill Development Corporation (NSDC), a public-private partnership set up by the Planning Commission with a mandate of providing funding and direction to private skill development programmes, the growing skill gap in India is estimated to be more than 250 million workers across various sectors by 2022. Against a target of skilling 8.5 million people in 2012-13, just about 1.4 million were trained by various ministries and NSDC by mid-November 2013.

The fact that employers are themselves aware of this deficiency reflected in a survey of employers where 78 percent of the respondents were concerned with the growing skills gap. With over 77 projects carried out by the NSDC over the past three years notwithstanding, it appears that the only way NSDC may cross its milestones is by involving large private companies and institutions, which have the means and infrastructure to successfully implement such large scale projects.

Win-Win Situations

The benefits of skill development have been clearly articulated by PM Modi with regard to solving the nation’s unemployment and job creation problems. Skill development will help prospective employees, as long as they are not curtailed by the private organisations by which they are trained, get easier access to the formal job market where they can bargain for higher incomes, work under safer labour conditions and be provided better health care and medical facilities. The private sector on the other hand, by deploying its CSR capital on skill development projects, also stands to benefit enormously from the availability of a large skilled and disciplined workforce. Such a workforce can easily translate into better levels of customer service, reduced absenteeism and employee turnover, increased productivity and efficiency, along with reduced recruitment costs.

People-Public-Private Partnerships

What is common between most public-private projects that have been successful is the linkage between a corporation’s core business activities and the sphere in which it decides to contribute to social development.

A prominent example of such practices includes Tata Motors’ partnership with 135 government-run industrial training institutes across the country-31 under the public-private partnership model-involved in training nearly 10,000 youth every year in areas of vehicle repair and maintenance. The company clearly sees a direct link between the community’s employability needs and its own business requirements. In such cases, better management, involvement of domain experts, and technological transfer enables projects to be scalable without which it isn’t possible to have the wide impact that is needed. Similar projects include those in the IT-BPM sector in providing language and computer literacy skills, large scale skill development projects involving collaboration between the Ministry of Labour, NSDC and private and public mining corporations, and some well-run Employment Exchange Programmes in Gujarat providing training not only in basic soft skills and computer literacy but also collaborating closely with industry to provide high end facilities for trainees. With the proliferation of Industrial Training Institutes (ITIs) in the country, the creation of a Skill Development Ministry, and the success of the Kaushalya Vardhan Kendras, there is immense activity and progress being made with respect to skill building for India’s youth. It is such collaborative thinking and action that is required on the part of the government and the private sector which will not only propel growth but ensure that the growth achieved is sustainable, inclusive and equitable.